Setting up company taxes by location provides withholding based on time worked in each location.

• A. Yes, it does
• B. No, it uses home state only
• C. Only for international employees
• D. Only for salaried employees

Answer: (A)

When payroll is set up by location, withholding is allocated to each jurisdiction based on where the employee actually works. The system tracks the time or hours spent in every location and uses that to determine how much of the wages should be withheld for each location’s taxes. This ensures compliance with multiple tax authorities and prevents over- or under-withholding by distributing the payroll across the states or regions where work occurred. It’s not limited to the home state or to international employees, and it isn’t exclusive to salaried staff—the same approach applies to any employee whose work spans multiple locations.